Americans increase borrowing in March

Published: May 8, 2004 8:00PM

WASHINGTON (AP) Americans borrowed more freely in March as an improved job climate and stronger economy made them more willing to take on debt.
The Federal Reserve reported Friday that consumer credit increased at a seasonally adjusted annual rate of 3.4 percent in March, or by $5.71 billion, from the previous month.
That pushed total consumer credit outstanding to a record $2.02 trillion in March.
The increase in borrowing in March marked a big pickup from February, when consumer credit nudged up at a 0.5 percent rate, or by just $883 million, the smallest increase since November, according to revised figures.
The Feds report includes credit card debt and loans for such things as boats, cars and mobile homes. It does not, however, include real-estate loans, such as home mortgages or popular home-equity loans.
Demand for revolving credit, such as credit cards, rose at a brisk 4.1 percent rate, or $2.58 billion, in March. That compared with a 0.4 percent growth rate in February, or an increase of $226.6 million.
For nonrevolving credit, which includes loans for cars, vacations and education, demand went up at a 3 percent pace in March, an increase of $3.13 billion. That was up from a 0.6 percent rate of increase seen in February, or a rise of $656.6 million.
Federal Reserve Chairman Alan Greenspan said that, in general, American households, which have taken on heavy debt loads, are in a good position to take care of their obligations. Short of a period of overall economic weakness, households with the exception of some highly leveraged ... borrowers, do not appear to be faced with significant financial strain, the Fed chief said in a speech on Thursday.
Separately, the Fed, in a survey of senior loan officers at banks, said that U.S. banks are reporting stronger demand for business loans. That can be viewed as another sign that companies are feeling better about the economys staying power, economists say.
In another encouraging sign, banks also reported loosening lending standards for some business loans.
Over 20 percent of domestic banks, on net, indicated that they had eased standards for large- and middle-market firms, the largest share doing so since the beginning of the 1990s, the Fed said.